Fundamentals Will Again Matter--Soon

Morgan Stanley popped 14 percent at about 8:30 ET on word that Mitsubishi will buy up to 20 percent of MS.

Regardless, futures are practically unchanged, with many traders noting this morning that hedge fund and mutual fund companies are continuing to see redemptions, and the profit outlook is still poor. As a result, there is debate about how strong buying interest will be here.

Remember, this craziness will eventually subside, and fundamentals will matter again. Soon.

We start the week with several regional banks at or near new highs, including PNC Financials, US Bancorp, BB&T, and Wells Fargo. With the nice pop in prices, don't be surprised if some banks issue new equity or even merge in the next few weeks.

Most financials are trading lower pre-open.

Elsewhere:

1) The addition of 30 new companies to the list banned from short selling includes one curious choice: General Motors. The reason is that you don't have to be a company that is in the financial business exclusively; you just have to have a majority ownership in a company (subsidiary) that is a bank, savings association, registered broker or deal, insurance company, or something "similar." GMAC fits the bill, apparently. Pretty loose criteria, and it seems there may be many other companies that fit this criteria. GM ip 6 percent pre-open.

Our parent company General Electric, which has also been added to the list, up 3 percent pre-open.

2) Microsoftboosted its dividend 18 percent and announced a $40 b buyback.

WALL STREET IN CRISIS - A CNBC SPECIAL REPORT

3) Emails were flying among traders this week about the vastly expanded powers of Treasury Secretary Paulson. Mike O'Rourke quipped, " It does not matter who is running for President this fall, the important question is who are the candidates for Treasury Secretary, whose power will eclipse that of the Fed Chairman."